Huckabee tax plan raises eyebrows in U.S.

By Ed Stoddard

MANCHESTER, New Hampshire (Reuters) - Republican presidential candidate Mike Huckabee's plan to eliminate all income taxes and replace them with a flat consumption tax has the support of martial arts guru Chuck Norris but few economic analysts.

The former Arkansas governor's victory in the Iowa caucus, which kicked off the presidential nomination process for the November 2008 White House race, will bring his policy proposals under closer scrutiny as the candidates do battle in the New Hampshire primary on Tuesday.

Much of the focus has been on the social conservatism of Huckabee, an ordained Baptist preacher who has connected solidly with his party's influential evangelical base.

But some of his supporters have been attracted by his populist tax plan, which calls for an end to all income and payroll taxes. It is the key plank of his economic platform.

"Putting the IRS out of business" has been a common refrain in his speeches in both Iowa and New Hampshire and it always draws some of the most enthusiastic applause.

Huckabee says taxing income is a tax on productivity that stifles economic growth and hits the middle class and small businesses the hardest.

"The FairTax will replace the Internal Revenue Code with a consumption tax ... All of us will get a monthly rebate that will reimburse us for taxes on purchases up to the poverty line ... That means people below the poverty line won't be taxed at all," says his Web site.

"All our headaches and heartburn from tax stress will vanish. Instead we will have the FairTax, a simple tax based on wealth. When the FairTax becomes law, it will be like waving a magic wand releasing us from pain and unfairness," it says.